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National reinsurer, one of only a very few state-owned enterprises ripe for listing on the Namibian Stock Exchange

National reinsurer, one of only a very few state-owned enterprises ripe for listing on the Namibian Stock Exchange

The African division of Global Credit Ratings Co. (GCR) released the updated credit rating for the national reinsurer, Namibia National Reinsurance Corporation Ltd (NamibRe), this week, confirming its national financial scale strength rating as investment grade but moving it one notch higher from A+ to AA- with a stable outlook.

On the international scale, NamibRe’s rating also improved from BB to B+, also with a stable outlook.

Global Credit Rating Co. was founded in 1996 as the African arm of the New York Stock Exchange-listed Duff & Phelps. Very rapid growth followed and within only a short period the group established itself as the market leader, accounting for the majority of all ratings accorded on the African continent. GCR’s African regional headquarters are based in Johannesburg, with its main SADC, West, and East African regional offices in Harare, Lagos and Nairobi respectively.

In its NamibRe review, GCR stated that it had released new criteria for rating insurance companies in May 2019. Consequently, the ratings for NamibRe were placed ‘Under Criteria Observation’. GCR finalised the review for NamibRe under the released Criteria for Rating Insurance Companies, May 2019. As a result, the ratings for NamibRe have been reviewed in line with the new methodology and subsequently removed from ‘Under Criteria Observation’.

“NamibRe’s national scale financial strength rating upgrade reflects sustained improvement in earnings, together with maintenance of strong risk adjusted capitalisation and liquidity. These credit strengths are partially diluted by a relatively limited business profile.”

“The improvement in earnings was supported by a favourable claims experience, together with sound investment income. As such, the three-year aggregated underwriting margin equated to a higher 13% (FY19: 18%; FY18: 17%), compared to the prior three year cycle margin of 4% (FY16: 5%; FY15: 3%).”

“Furthermore, the return on revenue equated to 19% in FY19 (FY18: 19%: FY17: 9%).”

“Going forward, GCR views the maintenance of a favourable claims pattern, coupled with consistent investment returns as key drivers for earnings to be sustained within a strong range. Risk adjusted capitalisation is viewed to be strong, with a large capital base catering for the quantum of insurance and market risk exposures. Risk adjusted capitalisation may remain at similar levels, albeit note is taken for potential moderation, should mandatory cessions resume on the back of the legal dispute being settled in favour of NamibRe. Liquidity is viewed to be strong, underpinned by healthy internal cash flow generation and conservative investment allocation.”

“However, the coverage of net technical liabilities by cash and stressed financial assets equated to a lower 2.9x at FY19 (FY18: 4.6x) due to reserving adjustments, while operational cash coverage registered at an unchanged 14 months.”

“The Stable Outlook reflects expectations of persistent financial profile strength while maintaining a comparatively limited view on business profile.”

“Upward rating movement is unlikely to develop over the medium term. Conversely, negative rating pressure may stem from reduction in risk adjusted capitalisation and liquidity beyond expectations. Furthermore, earnings pressure may result in negative rating movement,” stated GCR.


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Following reverse listing, public can now acquire shareholding in Paratus Namibia


20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.